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COPYRIGHT 2006 Professors World Peace Academy
This paper is designed to draw attention to the need for lasting peace in Nigeria as a nation especially in the oil producing region of the country--the Niger Delta and also the need to reactivate other resources of the nation apart from oil. Nigeria is Africa's leading oil exporter and the fifth-biggest source of the United States of America's oil imports, but despite its oil wealth, many Nigerians live in abject poverty.
The irony becomes more critical with the situation of Nigeria's Niger Delta region, which is home to vast oil reserves, that make the country one of the world's biggest oil exporters and yet remains poor, under-developed and, consequently, prone to violence. Every time such violence occurs, many lives are lost and the oil industry is adversely affected leading to increases in oil prices.
INTRODUCTION
Nigeria is a country in Western Africa that borders the Republic of Benin in the west, Chad and Cameroon in the east, Niger in the north, and the Gulf of Guinea in the south. It is the most populated country in Africa (It is a common saying that one in every five African people is a Nigerian). The name "Nigeria" is derived from a combination of the words "Niger" (the country's longest river) and "Area."
A country of rich ethnic diversity, Nigeria has about 374 ethnic groups but usually classified into three major ethnic groups of Hausa/Fulani, Yoruba and Igbo. Nigerians are blessed with a variety and multiplicity of cultures and languages.
Even though the history of Nigeria dates back to before 1000 C.E., it was not until October 1, 1960 that Nigeria became an independent Nation within the Commonwealth of Nations under a constitution that provided for a Parliamentary system of government and a substantial measure of self-government for the country's three regions.
Nigeria became a Federal Republic in October, 1963 and the former Governor-General Nnamdi Azikwe became the country's first President. From the onset, Nigeria's ethnic and religious tensions were magnified by the disparities in economic and educational development between the south and the north.
THE CIVIL WAR OF 1967-1970
The Civil War of 1967-1970 broke out when the Eastern part of the country tried to establish an independent country (Biafra), in which over 300,000 Nigerians lost their lives. Part of the aftermath of the era is more concentration on the oil sector. Lieutenant General Yakubu Gowon became the Nigerian Head of State in 1970 and, during that post-war era, Nigeria enjoyed a period of economic growth that was due to an increase in the revenues from crude oil and the nationalization of the various oil companies. (1) However, despite promises of a quick return to civilian rule, the military rule prevailed and led to recurring coups and ethnic conflicts. Resulting political instability was characterized by various military governments except for the short-lived second republic of 1979 to 1983. The year 1999, however, marked the adoption of a new constitution and a relatively peaceful transition to civilian rule of which Chief Olusegun Obasanjo was elected as the President. (2)
Most civil society leaders and Nigerians witnessed marked improvements in human rights and freedom of the press under Obasanjo. As Nigeria works out representational democracy, conflicts persist between the Executive and Legislative branches over appropriations and other proposed legislation. A sign of federalism has been the growing visibility of state governors and the inherent friction between Abuja and the states over resource allocation. (3)
COMMUNAL VIOLENCE
The Obasanjo government has witnessed a lot of communal violence since its inception. In May 1999 violence erupted in Kaduna State over the succession of an Emir resulting in more than 100 deaths. In November 1999, the army destroyed the town of Odi in Bayelsa State and killed scores of civilians in retaliation for the murder of 12 policemen by a local gang. In February through to May 2000 over 1,000 people died in Kaduna in rioting over the introduction of criminal Sharia law in the State. Hundreds of ethnic Hausa were killed in reprisal attacks in southeastern Nigeria. In September 2001, over 2,000 people were killed in inter-religious rioting in Jos. In October 2001, hundreds were killed and thousands displaced in communal violence that spread across the states of Benue, Taraba, and Nasarawa. On October 1, 2001, President Obasanjo announced the formation of a National Security Commission to address the issue of communal violence.
President Obasanjo was reelected in 2003 to continue with the daunting task of rebuilding a petroleum-based economy, whose revenues have been squandered through corruption and mismanagement. Most times there has been one problem or the other in the Niger Delta over the environmental destruction caused by oil drilling and the ongoing poverty in the oil-rich region. (4)
Presently, Nigeria is comprised of 36 states and the Federal Capital Territory of Abuja. Each state has its own House of Assembly (comprising of elected members from the Local Governments--538 in number) and an elected Governor who appoints the Executive Council to assist in running the affairs of the state. There is a Minister in charge of the Federal Territory of Abuja while the 3-tier arm of Government at the Federal Level consists of the Legislative (House of Representatives), the Judiciary (the judicial system), and the Executive (the President/Commander-in-Chief of the Nigerian Armed Forces). The Motto of Nigeria is "Unity, and Faith, Peace and Progress."
The two major religions in Nigeria are Christianity and Islam (they engage in religious clashes especially in the northern part of the country), while some people practice the traditional African religions.
ECONOMY
The impact of Oil and Gas on the Nigerian Economy has been tremendous. Since the beginning of the oil-boom, Nigeria has been depending on almost a mono-product economy. Oil and gas account for over 90 percent of foreign currency earnings, the government is usually very careful in managing this industry. The national budget depends heavily on the revenue expectation from oil and gas and this may remain so well into the next century.
Before the discovery of oil, the economy of Nigeria possessed an enormous potential as far as productivity, vitality, and diversity are concerned. About 70 percent of the population is employed in the agricultural sector producing cocoa, maize, rice, yams, peanuts, bananas, sugar cane, cotton, rubber, and dairy products. However, the oil boom has stunted the needed development in diversification and completely erased the progressive growth of the other sectors (including agriculture) contributing to the economy. As a result of this neglect of the agricultural sector, agricultural production could no longer keep up with population growth; hence Nigeria has become an importer of food. Consequently, agriculture and other non-oil sector, which as at 1962 contributed 78.2 percent of the nation's revenue, dropped drastically to 1.1 percent in 1977, while crude oil contribution rose from 13.3 percent to 98.9 percent over the same period. Currently, Nigeria's economy predominantly depends on the production of crude oil which accounts for about 95 percent of the nation's export earnings while agricultural products and other non-oil commodities shared the remaining five percent among them.
BACKGROUND OF THE OIL AND GAS INDUSTRY
The earliest known search for hydrocarbons was in 1906 when the Nigerian Bitumen Company unsuccessfully explored for bitumen deposits northeast of Lagos. The next significant development was the granting in 1937 of the exclusive rights to Shell D'Arcy Company for oil exploration throughout the length and breadth of the country. It was not, however, until some 20 years in later that Shell-BP discovered oil in commercial quantity in the Niger Delta. With the first oil shipment in 1958 (at a rate of 6,000 barrels per day), the oil sector began to assume an increasing importance in the nation's economic life.
More discoveries were made and production in the early period was mainly from the eastern part (part of the Niger Delta) of the country. One of the milestones during this period was the commissioning of the first Export Terminal by Shell-BP at Bonny, Rivers State in 1961. The commissioning of the Trans-Niger pipeline in 1965 facilitated crude oil evacuation from fields in the then Bendel State. Oil production was soon to be interrupted by the civil war, during which production was severely reduced. The end of the civil war in 1970 witnessed a rapid increase in field development and additional investment in oil field facilities resulting in a sharp increase in the nation's oil output. The nation achieved a production level of 1.5 million barrels per day in that year and by 1971 Shell's second Export Terminal at Forcados was commissioned to further enhance crude export. It is significant to note that the price of crude oil at this time was about $2.00 per barrel.
The Nigerian oil and gas industry has come of age. After forty years of active oil exploration and production, Nigeria is poised to play a key role in the world energy supply well into the next century, if the right strategies are adopted to encourage investment. The main strength of the Nigerian oil industry is the abundance of both proven and undiscovered reserves of high quality oil which can be exploited at relatively low cost compared with other major oil provinces.
Although the early running was made by Shell, other oil...
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